7. Security to be furnished by certain dealers.

(1) The security to be furnished under Section 13, may be furnished by the dealer in any of the following manner, namely-

(a) by cash; or

(b) by depositing with the officer concern National Saving Certificates issued by the Government of India of a face value not less than the amount of security required to be furnished, duly endorsed in favour of the Commissioner or assessing authority concerned; or

(c) by furnishing to the assessing authority concerned a guarantee from a scheduled Bank having its Head Office or a Branch Office in the State agreeing to pay to the State Government or any of its officer on demand the amount of security fixed by the assessing authority concerned; or

(d) by executing a bond in favour of the State Government in Form ETLA-16.

(2) The Security furnished may, in the event of default in payment of tax, to the extent of tax due, be forfeited and charged towards such tax. The assessing authority shall in such case where such adjustment has been made, demand fresh security or additional security to make-up the amount adjusted towards the tax:

Provided that no action under this sub-rule shall be taken unless the dealer affected has been given a reasonable opportunity of showing cause against such action. Where dealer opts for exemption fee as may be notified by the State Government and complies with the conditions mentioned therein, then he shall not be required to furnish security under this rule.